84,000 lose jobs as 16 cocoa companies go under

Multi Trex Integrated Foods factory, Ibadan-Lagos expressway PHOTO: Femi Ibirogba

• 5% of cocoa’s $140b comes to Africa despite 70% of global output
• Nigeria loses $100b over inability to export major produce

Over 84,000 Nigerians have lost their jobs in the cocoa value chain industry while about 16 companies have folded up in the last 10 years.

The National President of the Cocoa Association of Nigeria, Mr Sayina Riman, exclusively revealed this to The Guardian, saying out of over 20 cocoa processing companies in the country, about 16 have folded up, sending over 84,000 Nigerians back to the labour market.

“In the past 10 years, we have lost more than 14 or so processing companies. We believe that those companies would have contributed a lot into the economy. And we believe that these companies on the average were employing more than 600 and above managerial and special skilled services per company, and with the multiplier effects, about 4,000 to 6,000 persons would be servicing the entire value in the industry,” Riman, who is also the Vice President of the World Cocoa Producers Organisation, said.

“By implication,” he added, “if we have an average of 6,000 per company times 14 to 16 companies, that is what we have lost. That is what we believe Nigeria is losing in the economy and that has been captured in our 10-year cocoa action plan to show what Nigeria can do.”

If the cocoa industry is properly coordinated, the association said, Nigeria could take more than N1 trillion annually into the economy through the multiplier effects.

The cocoa association further explained that, “that is why we believe the government should synergize with the private sector. We can definitely move up in production because we have the best and the most suitable business friendly climate in the cocoa industry.

“We are asking that the government should synergise with the private sector. Cocoa is 100 per cent private sector-driven from farming to warehousing, servicing, shipping, transportation, financing and processing. It affects every sector of the economy and it is still open and highly viable only if we can put our hands together, the public and private sectors, to drive the industry forward. And what is the driver? It is for us to start promoting consumption locally, while also promoting production.”

For now, only about four cocoa processing companies remain inefficiently functional, and the struggling companies are Oluji Cocoa Company Ltd in Ile-Oluji and Coop Cocoa Company in Akure, all in Ondo State; Ede Cocoa Plant Products, Osun State and FTN Cocoa Processors PLC.

Similarly, it called on the Federal Government to intervene in the crisis rocking Multi Trex Integrated Foods Plc, the largest cocoa processing factory in the country, which has been taken over by the Asset Management Corporation of Nigeria (AMCON).

“For the government to shut a company as large as Multi Trex with the largest capacity in term of processing in Nigeria, with about 65-metric-tonne capacity factory, is not good enough. Every country would like to protect its best by putting in resources and making sure that such an investment doesn’t go to waste.

5% of cocoa’s $140 billion comes to Africa
Mr Akin Olusuyi, Managing Director of Oluji Cocoa Products Ltd, while explaining the challenges to The Guardian, corroborated the facts from the association, saying the volume of the global cocoa trade is estimated at $140 billion annually, but only about 5% of that comes to Africa, even though Africa produces over 70% of the global annual output.

He said: “The point here is that the wealth accruable lies somewhere beyond production volume. Some of us are really concerned because those who benefit more from cocoa are not the farmers or the regions that grow this commodity. The question is: why is this so?

Cocoa pods

Olusuyi said “The reasons are straight forward. The global cocoa trade is controlled outside the borders of the growers. The major players have sold the idea that we are better off remaining as providers of raw materials to feed their factories and should be contented with remaining on the fringes and the rent taking that goes with that as it were.

“While they are building industries around our cocoa and growing their economies, we remain in the same low end we have been occupying in the global value chain since 1910, when the first batch of cocoa was shipped out of Nigeria.”

Nigeria lost $100 billion in 10 years
In another development, the Food and Agricultural Organisation (FAO) of the United Nations (UN) has disclosed that the country has lost over $100 billion since 2008 over its inability to produce, process and export additional cocoa beans, palm oil, groundnuts and cotton.

“It is estimated that Nigeria has lost $10 billion in annual export opportunity from groundnut, palm oil, cocoa and cotton alone due to continuous decline in the production of those commodities.

“Food (crop) production increases have not kept pace with population growth, resulting in rising food imports and declining levels of national food self-sufficiency,” the FAO report said.

The main factors undermining production include reliance on rain-fed agriculture, smallholder land holding, and low productivity due to poor planting material, low fertiliser application, and a weak agricultural extension system, among others.

The Agricultural Transformation Agenda (ATA), which the present Muhammadu Buhari-led government promised would be continued, set a cocoa productivity goal to double cocoa production in Nigeria from 250,000 in 2011 to 500,000 metric tonnes by 2015, but industry players claim the production has not improved.

Former Executive Director of the Cocoa Research Institute of Nigeria (CRIN), Professor Malachy Akoroda, said the goal was not backed up with sincere actions, describing the goal as far from realities.

National output of cocoa will increase from 230,000mt to 714,000mt. This will be accomplished by increasing planted land area from the current 657,143ha to 905,000ha.

As part of the private sector-led solutions to the challenges of the industry, the association says it has been working to increase cocoa beans per hectare from 350kg to 789kg.

“The average cocoa farmer who has about 2.5 hectares who normally produces an output of 875kg and earn a gross revenue of N525,000 will now produce an output of 1,625kg and earn a more reasonable gross revenue of N975,000.

“The plan has interventions directed at providing support to cocoa farmers who want to establish new plantations or introduce complementary enterprises into his farm business for income generation opportunities,” the cocoa association revealed.

In this article:
cocoaSayina Riman
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